Cascades : Q2 - Financial Results

Q2 2021

FINANCIAL RESULTS

August 5, 2021

DISCLAIMER

FORWARD-LOOKING STATEMENT

Certain statements in this presentation, including statements regarding future results and performance, are forward-looking statements within the meaning of securities legislation based on current expectations. The accuracy of such statements is subject to a number of risks, uncertainties and assumptions that may cause actual results to differ materially from those projected, including, but not limited to, the effect of general economic conditions, decreases in demand for Cascades Inc.'s ("Cascades," "CAS," the "Company," the "Corporation," "us" or "we") products, the prices and availability of raw materials, changes in the relative values of certain currencies, fluctuations in selling prices and adverse changes in general market and industry conditions. This presentation may also include price indices as well as variance and sensitivity analyses that are intended to provide the reader with a better understanding of the trends related to our business activities. These items are based on the best estimates available to the Corporation.

SUPPLEMENTAL INFORMATION ON NON-IFRS MEASURES - SPECIFIC ITEMS

The Corporation incurs some specific items that adversely or positively affect its operating results. We believe it is useful for readers to be aware of these items as they provide additional information to measure performance, compare the Corporation's results between periods, and assess operating results and liquidity, notwithstanding these specific items. Management believes these specific items are not necessarily reflective of the Corporation's underlying business operations in measuring and comparing its performance and analyzing future trends. Our definition of specific items may differ from those of other corporations and some of them may arise in the future and may reduce the Corporation's available cash.

They include, but are not limited to, charges for (reversals of) impairment of assets, restructuring gains or costs, loss on refinancing and repurchase of long-term debt, some deferred tax asset provisions or reversals, premiums paid on repurchase of long-term debt, gains or losses on the acquisition or sale of a business unit, gains or losses on the share of results of associates and joint ventures, unrealized gains or losses on derivative financial instruments that do not qualify for hedge accounting, unrealized gains or losses on interest rate swaps and option fair value revaluation, foreign exchange gains or losses on long-term debt and financial instruments, fair value revaluation gain or losses on investments, specific items of discontinued operations and other significant items of an unusual, non-cash or non-recurring nature.

RECONCILIATION OF NON-IFRS MEASURES

To provide more information for evaluating the Corporation's performance, the financial information included in this analysis contains certain data that are not performance measures under IFRS ("non-IFRS measures"), which are also calculated on an adjusted basis to exclude specific items. We believe that providing certain key performance measures and non-IFRS measures is useful to both Management and investors, as they provide additional information to measure the performance and financial position of the Corporation. This also increases the transparency and clarity of the financial information. The following non-IFRS measures are used in our financial disclosures:

• Operating income before depreciation and amortization (OIBD): Used to assess operating performance and the contribution of each segment when excluding depreciation and amortization. OIBD is widely used by investors as a measure of a corporation's ability to incur and service debt and as an evaluation metric.
• Adjusted OIBD: Used to assess operating performance and the contribution of each segment on a comparable basis.
• Adjusted operating income: Used to assess operating performance of each segment on a comparable basis.
• Adjusted net earnings: Used to assess the Corporation's consolidated financial performance on a comparable basis.
• Adjusted free cash flow: Used to assess the Corporation's capacity to generate cash flows to meet financial obligations and/or discretionary items such as share repurchase, dividend increase and strategic investments.
• Net debt to adjusted OIBD ratio: Used to measure the Corporation's credit performance and evaluate financial leverage.
• Net debt to adjusted OIBD ratio on a pro-forma basis: Used to measure the Corporation's credit performance and evaluate the financial leverage on a comparable basis, including significant business acquisitions and excluding significant business disposals, if any.

Non-IFRS measures are mainly derived from the consolidated financial statements, but do not have meanings prescribed by IFRS. These measures have limitations as an analytical tool and should not be considered on their own or as a substitute for an analysis of our results as reported under IFRS. In addition, our definitions of non-IFRS measures may differ from those of other corporations. Any such modification or reformulation may be significant.

All amounts in this presentation are in Canadian dollars unless otherwise indicated.

Please click here for supplemental information on non-IFRS measures.

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SUMMARY OF QUARTERLY FINANCIAL RESULTS

143	133	104	139	44	122	98
64	54
						23

Q2 2020

Q3 2020

Q4 2020

Q1 2021

Q2 2021

54	58	49	48	73	42	22	29		8
	3

Q2 2020

Q3 2020

Q4 2020

Q1 2021

Q2 2021

		Operating Income				Adjusted OIBD 1						Net Earnings				Adjusted Net Earnings1
Figures above	in	millions of CAN$							Figures above	in millions of CAN$
(In millions of CAN$, except								20192										20202		20212
amount per share)	Q1	Q2	Q3	Q4	Year	Q1		Q2	Q3	Q4		Year	Q1	Q2
Financial results
Sales	951	1,005	1,008	984	3,948	1,041	1,020	1,014	1,030		4,105	942	956
Operating income	54	63	94	5	216	70	64	54	104		292	44	23
Adjusted OIBD1	106	126	136	128	496	131	143	133	139		546	122	98
Net earnings (loss)	24	31	43	(26)	72	22	54	49	73		198	22	3
Adjusted net earnings1	13	26	28	29	96	39	58	48	42		187	29	8
Net earnings (loss) per	$0.26	$0.33	$0.45	$(0.27)	$0.77	$0.24	$0.57	$0.51	$0.72		$2.04	$0.22	$0.02
share
Adjusted net earnings per	$0.14	$0.28	$0.30	$0.30	$1.02	$0.42	$0.61	$0.50	$0.42		$1.95	$0.29	$0.07
share1

YoY Q2 adjusted OIBD decrease reflects demand contraction in Tissue and higher raw material costs for all segments, partially

offset by stronger volumes and higher selling prices for packaging segments

1. Please clickherefor supplemental information on non-IFRS measures. (2) 2021, 2020 and 2019 consolidated results have been adjusted to reflect retrospective adjustments of discontinued operations. 3 Please refer to the "Discontinued Operations" section and Note 4 of the 2021 second quarter Unaudited Condensed Interim Consolidated Financial Statements for more details.

HISTORICAL SEGMENTED QUARTERLY OPERATING INCOME (LOSS) & ADJUSTED OIBD1

54	94	71	100	122	110	65	108	64	100
	Q2	2020		Q3	2020	Q4	2020		Q1	2021	Q2	2021
					Operating Income			Adjusted OIBD1
		17			16	12		15		15	18	14	18
11			11
	Q2	2020		Q3	2020	Q4	2020		Q1	2021	Q2	2021
				Operating Income				Adjusted OIBD1

Tissue Papers (millions of CAN$)

54	36		40
31	10	20
	3		1
		-
Q2 2020	Q3 2020	Q4	2020	Q1 2021	(22)
Q2 2021

		Operating Income (loss)		Adjusted OIBD1

(1) Please click herefor supplemental information on non-IFRS measures.	4

HISTORICAL SEGMENTED QUARTERLY SHIPMENTS

Containerboard ('000 s.t. and % capacity utilization1)

		411	399	391	385
	360
	98%	97%	97%	96%
	92%
	Q2 2020	Q3 2020	Q4 2020	Q1 2021	Q2 2021
	Tissue Papers ('000 s.t. and % capacity utilization1)
	167	145	152	123	138
	87%		86%	80%	78%
		73%
	Q2 2020	Q3 2020	Q4 2020	Q1 2021	Q2 2021

(1) Utilization rate defined as total manufacturing shipments divided by practical capacity.

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